Driving growth through digital

When it comes to data and analytics, banks need to be digital-first to meet customers where they are. The experience Abbas Merchant, Executive Vice President and Chief Marketing Officer of Regions Bank has in developing data driven marketing organizations at both Regions and M&T Bank makes him uniquely qualified to discuss this topic. 

Merchant joined Regions in 2021 with a mandate of providing strategic direction across all aspects of marketing, including strategy and insights, brand and communications, media and performance marketing and experiential marketing. That’s a big job, but Abbas is ready. Prior to Regions, he served in leadership roles in marketing at M&T Bank, U.S. Bank and Scotts Miracle-Gro. He holds an MBA from Drexel University and a BBA from Temple University. Merchant talked with BAI about how his team focuses on the customer experience for Regions, a regional bank operating throughout the South, the Midwest and Texas. 

What role do data and analytics play in customer making business decisions? 

Data and analytics play a critical role in all marketing decisions, and especially the most important decisions. That said, the data are merely a starting point. What I mean is that while data is a critical ingredient, it requires a disciplined approach to harness its power. 

First, like any valuable asset, we must inventory, secure and organize the data and make it accessible to the analysts and decision makers. Then, we simply answer three questions: what, so what and, most importantly, now what? 

“What” involves identifying the key questions we are attempting to answer and hypotheses we might have regarding the issue at hand. “So what” involves data analyses, gleaning insights and synthesizing recommendations. The third question is the most important. This goes well beyond the recommendations to figuring out what needs to happen to act on them. We may have discovered the wisdom of the world, but if we don’t act on it, it merely serves an academic purpose. So, translating the insights into action is the most important, yet often the most ignored aspect. 

Has this role changed in the last five years? 

Yes and no. Yes, because we now have access to vast types and amounts of data, computing capabilities and sophisticated techniques such as AI and machine learning, etc., and the channel mix has also changed in favor of targeted digital and omnichannel marketing. 

But what has remained the same is the focus on translating the insights into action or the three questions I mentioned earlier— what, so what, and now what?

How do you go about establishing metrics to measure the efficacy of marketing efforts for acquisition and retention? 

Understandably, acquisition versus retention (or loyalty) requires a separate set of metrics because they refer to distinct audiences— acquisition focuses on prospects or non-customers, whereas loyalty focuses on existing customers. That said, broadly speaking we use three types of metrics: delivery, engagement and outcome. 

Delivery metrics such as direct marketing (e.g., emails delivered) and targeted digital media impressions tell us whom we reached with our marketing tactics. Engagement metrics, such as clicks, visits, and applications started, tell us how the targeted audiences reacted to our communications. We also use market research to understand how our marketing communications are influencing consumer perceptions of Regions. Outcome metrics such as conversion rate, cost per acquisition, return on marketing investment and months to payback tend to be the common ways we measure the impact of the marketing tactics. 

Then, we make sure that we have outlined the success metrics and test and learn criteria ahead of time so that we can determine the performance of the marketing efforts or glean learnings for ongoing optimization of marketing tactics. 

We deliberately allocate marketing dollars to ensure that we are dedicating significant spend to test and learn. For example, we allocate about 50% to 75% of the marketing spend to test and learn, which focuses on optimization. These tests leverage past learnings and hypotheses and tend to have a high success rate. But they lead to a 15%-to-20% improvement in results. We refer to these as ongoing optimizations. 

We allocate about 15% to 25% on efforts that test the frontiers of our knowledge. These generally have a lower likelihood of success, but higher returns if successful. Please note that these returns are not just financial but could be in terms of deeper insights that can help us craft new tests that may have a higher likelihood of success. And finally, we spend about 5% to 15% of the investment on tests that could be exploring new frontiers. You could think of these purely as R&D. 

What departments need to be involved and how do you best work with them? 

This is a very critical issue. Involving the key stakeholders and collaborating with them along the journey—not just at the point of decision—is very important. Collaboration does not happen by itself, it must be orchestrated deliberately by bringing along the right stakeholders and seeking their feedback during the process.  In my experience, there are three necessary elements to make this possible. 

First, a culture of collaboration is necessary. Over the years, I have been fortunate to serve in many great organizations and all of them would claim that collaboration is core to their culture, which is true but there is more to it. I have learned that we all succumb to the superhero syndrome, where one group or department receives or claims the recognition (or as it was saving the day). And in many cases, there are transformation initiatives, typically facilitated by external consultants, that start with team building and collaboration exercises with “new-ways-of-working” being a common mantra. But the success of these initiatives is often short-lived. That’s why it is very difficult to make this collaboration sustainable. 

At Regions, I find that collaboration is indeed core to our culture. I don’t see the superhero syndrome. Instead, we believe in the “league of superheroes,” where the superpower of each individual or group complements the others and synergies are created whereby the total is greater than the sum of its parts. And this is consistently reinforced by the leaders at the highest level of the organization. Even with this as the core tenet, we must be deliberate in ensuring that we focus on it. 

With the importance of the nature and type of collaboration established, from a marketing perspective, the right stakeholders need to be involved, which includes the following: business lines and product teams; channels such as frontline bankers, contact centers, digital, etc.; finance; customer insights and, finally, the marketing strategists. 

We are also intentional about ensuring that we are consistently seeking input and addressing any objections and aligning on the progress. This requires the hard work of influencing each other and working towards a common goal, and doing it with a sense of urgency so that we don’t bog down the process with bureaucracy. When we are at our best, this approach works smoothly, otherwise we de-brief, learn and improve. 

Tell us about the customer experience you provide. 

Many times, customers may select a credit card or a bank because they have a need and, perhaps, they see a special promotion or it may also be based on convenience. At the end of the day, banking is a relationship business. 

Therefore, to acquire new customers, we must first have a competitive value proposition: products, solutions and offers. But by acquiring a new customer, we are merely getting the opportunity to build that relationship with the customer and eventually benefit by meeting more of the customers’ financial needs and gaining a greater share of the customer wallet. This is where customer experience becomes critical. While an attractive value proposition may entice the customer to test us, it is the experience we deliver that turns new customers into loyal customers. When it comes to engaging and connecting with customers, the most important element is empathy, which really means that we must understand what is most important to the customers in the moment. With that in mind, there are three things that are most important to engaging with customers and delivering a good customer experience. 

First is their intent—what are they trying to accomplish now? Second is determining where they are in their journey—where are they in the process of getting the task done? And finally, how can we reduce the burden on the customers—making it simple, easy, and quick to accomplish the task at hand? 

To that end, when we interact with customers online, we try to understand what their intent is—what specifically are they trying to accomplish now—in this session. Then, and only then, we can figure out how we can help them. We call these “moments of truth”—Moments that matter to customers and how we show up in these moments are what delivering a good experience is all about, and while doing that, we might earn their trust. So, organizations must first and foremost really focus on understanding what is important in the moment to the customers. 

For example: If a customer is looking to do a wire transfer and comes to our website looking for the routing number, let’s not disrupt their flow by trying to sell them a checking account. Instead, we want to get them the info they are looking for quickly, easily, and simply. 

On the other hand, if the consumer is shopping for a mortgage, it would be good to know whether he or she is a first-time home buyer or a trade-up home buyer and whether the consumer is in research mode or ready to decide. Having access to this type of data or insight is critical for delivering a relevant experience. Here are a couple of examples of how we are personalizing experiences today.  

The first example is our new customer onboarding program. We all know that first impressions are very important. During the first 90 days, our new onboarding program includes 25 well-curated and highly personalized communications through multiple channels that help the customer get the most value from their relationship with the bank. We tailor the message to each customer based on what products and services they have, where they opened the account and their level of engagement, behavior, etc. 

In fact, in the first email, we embed a personalized dynamic video that actually refers to customers by their first name and summarizes the key services – most of them are free of charge – that would be specifically useful to them, focusing on how they can avoid surprises, easily manage their cash flow, etc. So, it is pretty cool. But it is more than just cool. We have seen 50% higher balances, greater engagement, and better retention. Furthermore, we also see much higher email open rates and higher click-through rates. Our goal was to deliver the same great experience they would receive in the branch in the comfort of their homes. 

Another example is that of our decisioning platform, we affectionately call it ROSIE, which stands for REGIONS OPTIMAL SOLUTIONS INTELLIGENCE SYSTEM. We feed a wide range of data into ROSIE including customer history, behavior, and interaction (real-time and delayed data), which are all used in AI/ML models combined with business rules to predict customer intent and journey ,which allows us to personalize experiences and messaging to people that interact through any channel. We present more than 2 billion messages across all channels which roughly translates into one message/customer/day. 

Today ROSIE does a good job of delivering relevant Next Best Actions (NBA) or personalized messages or offers, but our vision for ROSIE is to migrate from NBAs to Next Best Experiences (NBX). This really means delivering a sequence of relevant communications to the customers, not only when they interact with us, but also proactively reaching out to them across the different channels. Similarly, we see strong engagement with this type of orchestrated and personalized communication. 

BAI recently spoke with several prominent individuals at Commerce Bank, Synovus, Regions Bank and Salesforce about how they are addressing today’s customer growth challenges and opportunities. Learn more in our BAI Special Report, “Driving Customer Growth in 2023.”

Q&A conducted by the BAI Editorial Team